>> this is "taking stock" for wednesday, august 27, 2014. i'm pimm fox. today's theme, the boy scouts model, always be prepared. new research reveals detail of financial anxiety. plus, how professional sports stars prepare to retire. you will meet one that made the transition from playing to profit. and american craft beer, yes, being prepared in germany. how stone burberry is tapping the barrels in one of the biggest markets for beer.

-- how stone brewery is tapping the barrel some of the biggest markets for beers. all of that and more, but first, my cohost. >> that meeting would rue all around a $54 billion hostile takeover bid. set for october 6. williams-sonoma trades are down after hours. retailer another falling during after-hours trading. fighting a sluggish economic environment. >> thanks very much, carol massar. the american family is an

insecure one, that is what marianne cooper discovered when she looked at how the recent recession has affected the american family. the title of her new book is titled "cut adrift: families and insecure times." she teaches gender research at stanford university and was the lead researcher on the book "lean in: women and work and the will to lead." that was co-authored by sheryl sandberg. why did you decide to write this book? >> i decided to write it because most of the discussion about inequality and insecurity is statistics and it's presented in graphs and charts. but there's a lot of humanity in this story, so i wanted to but the human face on it. >> putting that human face on financial anxiety and stress, in doing so, what did you discover? >> i discovered we are weighed

down by something very similar, which is the anxiety generated in hard times. from wealthy business executives to low-paid domestic workers, everyone is feeling insecure. we just deal with it differently. >> let's talk about some of the ways in which people deal with it. have we learned anything through the recession about what is and is not important when it comes to money? >> i think, after the recession, median family income is down. many families are doing this belt tightening and they are trying to get by on very little amounts of money. this is worrisome from an economic perspective, because then they have to turn to credit to get the things they need. we saw how that worked last time, which is that they take on too much debt and they buckle under the weight of that debt and our economy goes down as well. >> there are some elements to this. let's talk about someone's jobs. do you have any long-term assurance that he will have a job?

>> not even long-term assurance, but whether you will get a good wage and benefits. it used to be that we shared risk with our employers. they used to provide us with benefits, health care, retirement, all these things that enabled us to have a good, and secure life. that has begun to unravel and the risk goes on to the families. >> does that encourage more individual responsibility? >> it does, but it leads to is insecurity for families. families need to have a foundation upon which they can plan and execute toward long-range goals. if they do not have stability, it's hard to plan. >> one of the long-term goals can be providing for the education of children in the family. what did the book reveal about people who anxiety there? >> there is only a portion of americans that can set aside anything for sending kids to

college, and that is upper-class families. many wanted to send their kids to elite educational institutions. that cost a lot of money. harvard and princeton is close to $500,000. they are worried as well. >> what about the notion that the things that used to be considered luxuries are now considered necessities? whether it is entertainment or clothing or travel, in previous recessions or even during the depression, those things were unheard of. >> i think a lot of americans have reduced their spending on several things. most of us are focused on the basics. i found that people were trying to make insecurity seem more secure than in actually was. they were talking themselves through insecurity and putting a brave face on what was actually a very sad reality. >> what is the role of the u.s. government when it comes to providing some kind of foundation for people's financial future? >> i think it's central, and public policy has failed us. when people experience

insecurity, they often experience it as a personal failure. it is not something they did wrong necessarily. it is that policy has failed them. policy needs to change to get us out of it. >> is it other institutions, maybe social community groups, or religious institutions can provide the basis for this financial health? >> religious institutions are right now. welfare has been outsourced on the federal government out to state based and faith-based urbanization's command they are doing an amazing job providing people with food, shelter, and clothing. the problem is, people in need -- that should not be only place to go. it can lead to people feeling like they have to say things or believe in things that they might not necessarily believe in order to get the help they need. people need to be able to turn to their employer, their community, and two other types of institutions to get these things. >> it is obviously a mosaic and

there are different pieces to the fabric of wealth in america. what about the upper income brackets? what do they worry about? >> they worry about creating an economic firewall between their family and this economic insecurity. the problem is, affluent families respond by pushing for more and more. working-class families actually lower their expectations and try to get used to less. we actually make inequality worse. and then we do not have the political will to come together and stop it. >> as far as education to lift people out of this morass of financial anxiety that you have described, is this successful? is that the right path to try to alleviate these kinds of worries? >> it's one thing we absolutely need. we need more americans in higher education. what we are seeing is that

middle-class and working-class kids are enrolling at lower rates and graduating at lower rates. that is opposite of what we need. >> as far as the prognosis, after coming complete circle with the book, are you more or less encouraged? >> i'm optimistic because it is something people are talking about. we need to come together and realize we have a problem. we need to create, like a 12 step program to get out of it. people are talking about it, and that is the first up in addressing it. >> i want to thank you for giving us his research and enlightening us about this issue. mary ann cooper, sociologist and author of the book "cut adrift: families in insecure times." coming up, taking a look at the central government and whether these are being shifted to the poor. we are talking about poverty capitalism next. ♪ >> this is "taking stock" on

bloomberg. i'm pimm fox. there is always been a relationship, for example, between defense contractors and the united states military. what happens when services are shifted to the poor? we are joined by tom edsall, a professor at columbia university, and author of "age of austerity." he joins us from washington. i wonder if you can just describe to people what is poverty capitalism. >> it turns out that the government and private companies are finding that the poor are a great source of revenue. you can shift the costs, in missouri, for example, 20% of the city government is financed

through municipal court fines that are imposed way disproportionately on the poor are records that -- the poorer residents of ferguson. you also have court services like probation overseeing, and collection of fines. and they don't charge the government anything. what they do is make their profits by charging the people on probation, or the people who owe money to the municipal court a fee for services. you have two mutual back scratching processes where municipal governments are reducing their costs both through fines and transferring services. >> you recently wrote an op-ed piece for the new york times and you gave a description of an

electronic monitoring service that is employed by orange county, california. i wonder if you could describe what you found. >> the company, which actually has over 200 contracts across the country, sentinel offender services, tracks people on probation, provides all the services basically of a probation department. the city governments can then stop paying the cost of maintaining their own probation department. sentinel then collects a finance system, they call it, where the offender pays for the cost of electronic monitoring, the costs of drug testing, the cost of a fee -- whatever fines they owe. all of these costs are shifted to the defendant or probationary person.

and the company comes out making money and the invisible government comes out making money. >> i wonder if you could also describe these private probation service companies and their relationship to government oversight or regulation. >> well, there's a big problem in that they are not subject to the same kind of transparency requirements that governments are. and in many cases, it is very difficult to find out what fees they charge, how much profit they are making. they are usually closely held companies, so you do not see any public annual reports. you have a public function taking place in the private sector without any real oversight. and in addition to that, these companies, when they are collecting money from people who owe fines, they use the threat

of sending someone to jail for failure to pay the fines as a true collection agency tool. sometimes that is appropriate, but sometimes that's inappropriate. it scares the bejesus out of people. >> what regulations -- for instance, with judges? >> for judges, they want to keep their taxes down and have a low-cost system. it's to their advantage to turn to these companies. and there is making this calculation, the people paying the penalty, in other words the defendants and those paying off fines, often don't vote and in most cases cannot vote against they have committal records.

many states prohibit them from voting. they are not a constituency that judges have to worry about, and they are not a constituency that the general public cares much about. it is kind of a free shot for the judiciary to turn to this kind of process. >> much appreciated. tom edsall, a professor at columbia university, and author of the book "age of austerity." coming up, alibaba is set to go public in september for a potential $190 billion. how is the company actually going to sell its stock, and what happens to yahoos stake in the chinese online giant? find out next. ♪ >> this is "taking stock" on

bloomberg also i'm pimm fox. alibaba going public has boosted its spending on public platform. joining me to discuss this ipo process is leslie picker, who covers ipos for bloomberg news, cory johnson. leslie, i want to be in with you. the steps that will be taken, once the roadshow, you know, the kind of entertainment portion of the ipo takes place, where they try to dazzle potential investors with all the wonderful things alibaba is doing, what does that look like echo >> the circus is set to begin and what i'm hearing from sources is that this will take place over the course of two weeks. they need to go as many places as possible because they need investor by-in and investor feedback much more so than with the average deal.

it starts in hong kong and moved to london and then the u.s., and not just big cities like new york, boston, san francisco, but places like kansas city, denver, some of the smaller places in the midwest. >> why? >> a broader exposure to do for class of investor base. on the roadshow, they get a sense from investors were they are essentially modeling the shares for a year or so. and then they will have a set range and a perspective to see the best place to price the shares. and the goal is to price them in a way that pops a little bit on the first day and shows a good outcome for the investors that bought into the ipo. >> cory johnson, more art than science when it comes to initial public offerings echo >> there's a point where they will have to

take the temperature, but yes, this is such a big deal. they have a lot of stock to move. the individual investor wants to get involved, and only the banks best customers will get them. in this case, so much stock will be offered that they are looking at a price that will take this deal down, but also looking to anyone to take it, because they got to sell so many shares. >> leslie, anyone can take it. all right, let's describe what would happen if you were a retail investor and you want to buy 100 or 200 shares of alibaba. i'm assuming that you can do pretty easily. >> is more complicated than that. it is very difficult. you have to request it through your broker, who will then get allocated a certain number of shares. i would certainly characterize alibaba as being one of those. it is much more to the goal to get allocation. the way the bankers are devising this deal is, they have two

clients. they have the institutional investors on the one hand, those who come deal after deal and buy the shares of the company. and on the other hand, they are advising the company and they have to borrow against both of those interests. as you can tell, in that equation, there are no retail investors. there is no incentive to get retail investors in there. and it has been ruled that those are ok. ipo's are a risky asset class and getting more retail involvement in there may not be a good outcome for everyone. >> what about institutional? you go to one of the cities on the roadshow and decide alibaba is a good investment. you raise your hand and say, ok, i will take 500,000 shares. >> there are a couple of dozen investors, the big names. >> and they will be doling them out to their customers. >> exactly. alibaba will follow the money. they will go to baltimore to visit t. rowe price and they will visit fidelity.

but it is a step letter allocation where they say, i want this many at this range and fewer shares at the high end. it is called the book building process where bankers gather that information be able to tell exactly where they price it. once they do price it, certain institutions will get allocations that they may or may not expect. they may say, i want this many shares at this price, and it's given to them and they may keep it until the next day and buy more shares, that's the goal to get the first-day pop, or they may flip it. >> one company that will be selling some of its shares is yahoo!. they have a stake in alibaba. how does that work, cory johnson? >> in this case, yahoo! has been looking for a way to get out of their stake and looking for a way to do that. they will not be selling all

their shares. they are threading the needle by keeping some to participate in any of side going forward in terms of their valuation. at the same time, getting cash out into corporate offers. >> leslie, let's say, you want to buy as an institutional investor, you you want to buy and then sell your shares. is there a ready market for? will you be able to move large blocks of stock? >> that is where the trick comes in. remember, with facebook, that of course, was $16 billion, so on par we are looking at alibaba. certain institutional investors said, actually, i'm not taking any allocation here. and other institutions heard the same rumor. they also decided not to get allocations, which led to, of course, the spiraling effect the first-day. investors realize when they were not joined by their marquee investors, they also had to sell. and guess who picked up the brunt of those sold shares? the retail investors.

>> there you go. we have to leave it there. leslie picker and cory johnson. coming up next, i will tell you about houlihan's restaurant. ♪ >> this is "taking stock" on

bloomberg. i'm pimm fox. carol massar. but >> russian hackers were able to steal data from jpmorgan chase and at least one other bank, according to people familiar with the case. the fbi is investigated whether was meant as retaliation against economic sanctions against russia.

members of the central workers union are -- blocked major thorough fairs in a protest over taxes and wages and the overall cost of living in argentina. and a town in eastern spain were awash in red pulp as people pelted each other with 125 tons of ripe tomatoes. the event was inspired by a food fight between local children in 1945. nonresidents for the second year in a row were charged to join in. the money was raised to help pay off some debt. >> thanks very much. houlihan's restaurant, big expansion plans. the company owns for restaurants -- four restaurants and has grown. the chief executive, bob hartnett is with us. and also with us, leslie picker. i will let her tell you why she still here.

let's start talking about houlihan's. how did you get involved with the restaurant group? >> with houlihan's? >> yes. but i was the co of einstein's. >> einstein's bagels. but we took that through bankruptcy and i was looking for something to do and in 2001, houlihan's was in a bit of trouble. i got recruited by ge capital to take a look at it for 30 days, and that turn into a 14 year career. >> 30 days turned into 14 years? >> yes. >> how do you compete with the competition? >> we have an upscale menu and what separates us from the competition is that our menu is a bit broader than most. our check average is about $16 and a lot of other casuals are

in the $20 range. and we have a robust bar scene. most casual diners have about a 15% liquor mix. we are at 25% will stop you can go on one side of the restaurant and get a casually elegant meal. or the other side of the bar is cool and hip with a lot of energy and you get a drink and an appetizer. it's the best of both worlds. >> leslie picker, not only are you an expert in the world of initial public offering, but you brought polish to houlihan's. you said you worked at houlihan's. >> it was my first job at 16. it was the first job i ever applied for. the reason i went there is because we ate there all the time and i said, ok, it's close to the house. i have this fancy drivers permit. i will drag myself over there. they hired me on the spot. i'm $80 an hour, which was quite

a bit of money. it was eight dollars an hour, which was quite a bit of money. it was much more competitive than other places in the neighborhood. it was a really good experience. exposure to getting feedback and taking direction. >> go ahead. >> i was going to say our industry is full of young people, mostly under 25, and we teach a lot of life skills. every restaurant is a little microcosm of, really, the world. you kind of got a little bit of everything going on. we teach a lot of life skills, the people i hope use in your career moving forward. >> okuma definitely. >> reading people. >> absolutely. >> bob, there's also the aspect of producing the food and paying for everything. give us an idea of the cost of running a houlihan's. >> the cost of goods are going up, especially beef. we are starting to see that

increase may be 8% to 10%. it's not insignificant. the rest of the costs are pretty stable. and the other big cost is labor. >> where do you want to expand houlihan's? >> quarterly, we are east of the mississippi and we want to fill the markets we currently are already in the muscle chicago, st. louis, texas. and from a franchise business, we are happy to talk to anybody about the rest of the country. >> and from our franchise site, you can also talk about jay gilbert. what is the concept behind this? >> jay gilbert is an all upscale, prime usda steakhouse. we would compete with a lot of the names you would know. what separates us is that our cooking style is a woodfired grill. and our check average is a lot lower than the competition, because all of the entrées come with two sides, where most of the rest are à la carte. you can afford to eat there with your own money. we are $20 to $40 less.

we think that will help in the future because we have great value for the consumer, but also the pricing power as costs go up. >> you know about people's desire for good meat and various types of protein. now everybody talks about protein and not necessarily the actual food. they say, well i'm not eating carbs. i'm just eating proteins. >> oh, sure. protein with a huge thing when i was working at homelands, and is still a big heart of the kansas city culture. with barbecue on the one hand and steakhouses on the other. it is not something that kansas cityans will avoid, despite the costs going up. it will be a huge stable of the city. but that is good for you. >> is very good for me. >> and the acquisition between burger king and tim hortons, what is that all about? >> there are statements that

they're going to take over the world. i guess both companies saw something in each other and think it is a good thing. we will see how it works out. tim hortons used to be owned by wendy's at one point. >> that's right. but it's kind of >> it's kind of a divorce and a new marriage, but to the same type of person. >> what is bristol's? >> it is all fresh seafood. we operate under three names, bristol seafood grill, devon seafood grill, and checkers. >> where do you want to open up? >> major markets. anyplace we are not maybe would be willing to go. those are all corporate restaurants. we are not franchising at all. >> what is the hottest selling item at luhansk right now? >> the stuffed chicken. >> the stuffed chicken. and long island iced tea.

>> thank you for joining me. coming up next, i will introduce you to a former nfl player named keith bullock. we will talk about his transition from football to finance and why he has pertinent advice for his fellow athletes. also, the executive of stone brewery company on becoming the first american craft brewery to own and operate his brewery in europe. ♪

>> being a professional athlete is an experience of a lifetime, but when the sports career ends and the life goes on, the earnings train can hit a wall. how do athletes stay solvent? we can ask keith, a former linebacker in the nfl.

thank you for being here. tell people about your career in the nfl and the fact that you played 11 years. >> my career in the nfl was great. 10 years as a tennessee titan and my last years at the new york giants. it was great to play for the home team. the ride was everything you would expect it to be. i had an opportunity to play in every game there is except the super bowl. >> you said that the ride went by very quickly. your member the day you were drafted. >> yes, i remember. it was a great time in my life. it goes fast, though. >> do you remember the first check you got? >> yes my first check was for $170,000.

i bought the car i always wanted. i bought a range rover. i bought a townhouse. i took care of the essentials. i wasn't really into jewelry and all the other stuff. i definitely spent some money in the off-season. as a rookie, i kept my money tight to my pocket. >> and you also invested in your brain. you took business coursers. you were at stafford. >> i think it is important to invest in yourself. a lot of players do not do that. i took the time to take some the discourses at stanford and harvard respectively. and i just got my mba from george washington university. that is the best thing,

investing in myself, learning what to do with my money, and the things that interest me as i'm a retired nfl player. >> what do you do with this education and insight? >> right now, i'm trying to be an analyst for nfl radio and sirius xm radio. i have a team i'm trying to put together to help athletes in transition. if i can find the right guys to help me put my vision together, that would be great. at first and foremost, i want to put my time toward broadcasting, because now that i'm graduating -- >> any thoughts for current players or players that are

recently retired? how do they deal with their money and the future? >> the best way to deal with your money is to have a great financial team. when i say at team, you have to have more than a stockbroker. >> you had an agent that helped you, right? >> my agent was my agent, but i also had an account and that oversaw all of my finances, whether investing in stocks, bonds, whatever. she oversaw everything. to have the checks and balances is important. also, in the off-season, get away from football, see some of the things that you like to do, and develop other hobbies and interests. definitely save more money than you spend. and you've got to invest in yourself. at the end of the day, you have your brand when you are done playing. you can still monetize off of your brand, although you are not making plays in the nfl anymore. >> that is one of the things you want to do with the transition sports entertainment, to develop the brand so they can use it in the future. >> what i learned in school was about branding, how you can take one's brand and put it on

different forms to enhance the view of the player or person. and really, just teach men how to become business savvy, to take what they've already done throughout their time in the nfl, whatever it is, and to turn that into a business themselves, or become entrepreneurs themselves. >> did you have to learn how to say no to a lot of people? >> you always have to say no. you learn that your rookie year. you're saying no to aunts, uncles, people who come out of the woodwork, friends, cousins, whatever. at the end of the day, you set the precedent for how you want your company, which is yourself, to be run. >> but one thing you want to say yes to is this als challenge. how did the cold water field? >> very cold. i did it twice. a friend of mine, tim shaw, was diagnosed with als last year. he was a former player for the

titans. although we didn't play together, we did get our masters in business together and were very close. >> i want to thank you for spinning time with me. former nfl keith bulluck, i appreciate it. you've heard about coals to newcastle. how about an american brewery making beer in germany? also, coming up on "bloomberg west" snapchat is looking to be the start of with the greatest valuation, up to $10 billion. but is it losing some of its cool with teenage users? is all coming up on "bloomberg west" right here on bloomberg. ♪ >> this is "taking stock" on

bloomberg. i'm pimm fox. american beer in germany, how is this possible? the american craft beer business is currently worth $14 billion a year and growing 20% annually. stone brewing company has averaged 50% since hopping into craft brewing. and they plan to be the first american craft brewer to run its own brewery in germany. i'm joined by greg koch, the chief executive and founder. what put this idea into your head that you wanted to start a brewery, and in all places, germany? >> my partner, steve wagner, and i decided a few years ago that we would love a place in europe to take our style of beers over there and brew them ourselves with our own facility. after visiting about 130 sites in nine countries, we found this amazing facility, this old

historic gasworks 1901 building that is just gorgeous in berlin. we decided it has to be the spot for it. that is where we are planting our flag, so to speak. >> give people an idea of what is going on with the business of stone brewery as it stands in the u.s. >> we are the 10th largest kraft bury in the united states. in the world of craft brewing, we are large. but in the world of international conglomerate brewing, not even a speck in the ocean. but we have been successful for strong character, big hoppy beers. stone ipa is our flag ship. >> india pale ale, for those who are not initiated. >> right, and for those on the west coast, we created one that is very aromatic and hop forward.

that is what we are all about and excited to do it in germany now. >> and you have that coffee milk stout. where do you come up with the names and how do you decide what to brew? >> our basic philosophy is that we do it for us. >> just for you? >> and our beer is for people who think that we make great beer. our beer is not for those who do not like it. therefore, it is our job to brew the way we think is best and let people decide for themselves. >> do you have to do anything to change the brewing process in germany versus the way you do it in the u.s.? >> no, that's a common misconception. >> we were talking about this he for you came on, this. the law.

>> the so-called purity law. >> the so-called purity law. we do not label any of our drinks as beers. it is the stone ipa or so on. the german purity law is a little misunderstood, and a complex conversation. >> tell me about -- >> it used to be that this narrow segment was beer, and now people understand it is varied. we just recently released the stone go-to ipa which is a modest 4.5%.

our flagship is 6.9%. and we released one with collaborators that is 13.5%. >> that is a broad range. the marketing, the advertising, the actual bottles, the design, where does that come from? >> we feel that what we do at stone is a form of art. there is the commodity side and the artisinal side. we are on the artisinal side. the bottles and names have personality. we let the personality shine through. we do not do any advertising. we never have in 18 years. we go on the merits of the beer

itself. >> and what does a sixpack cost? give us a range of prices. you had a range in alcohol content. there ought to be a range of prices, too. >> right now, we are finishing a campaign on indiegogo where 1.5 liter bottles are selling for $33 dollars a piece. or a typical sixpack, depending on where you live, $10.99,$11.99. >> do you have a favorite? >> i just open the refrigerator and say, what am i in the mood for? >> it doesn't take you any trouble when you are gary echo >> not usually. -- when you are there? >> not usually. >> keep us up-to-date with what is going on with brewing in germany. we have a headline with jackma. he has become china's richest man. thanks for "taking stock was quote and i'm pimm fox.

good night. ♪